Google Shopping is a really cool program in that you can get granular with breaking out detailed ad groups, specific to categories, brands, price buckets, seasonal items (use AdWords label), and a host of other online product variables.

While this option is awesome, there is also the danger of getting too carried away. Eating healthy is great, but if you eat too many carrots you’re going to turn orange.

If you have multiple ad groups in Google Shopping, such as an ad group for every category in your feed, you likely have some bid overlap going on.

What is Product Listing Ads Ad Group Bid Overlap?

In the case where you have a Product Listing Ads All Products ad group (your whole feed), in addition to various other ad groups which also cover your whole feed, (e.g., category) you’re potentially out bidding your All Products ad group products with the combination of your other ad groups.

What this looks like in the AdWords login:

This problem is easy to run into, especially if you’ve tried to break out your PLA campaign based on your product types (categories), brands, and other product variables into various ad groups. In the example above, this online merchant has broken out product type ad groups for all of the categories in the product data feed.

Essentially, what’s happened is that too many ad groups (category above) have products in the All Products ad group.

Why Product Listing Ads Ad Group Bid Overlap Happens

Since your All Products ad group encompasses your entire data feed (all of your products), naturally you’re going to have some overlap with any other ad groups you create.

If you create two category ad groups and a best seller ad group for instance (in addition to your initial All Products ad group), all three of those ad groups are going to potentially have some of the same products.

Visually, it looks something like this:

This is an over-simplified version of what the All Products and other ad group overlap looks like, but the inclusion of one or more product (A, B, C) in one or ad groups in addition to the All Products ad group is the same.

Why Product Listing Ads Ad Group Bid Overlap is a Problem

Since Google Shopping PLAs work with a bid hierarchy, you’re also bidding higher for more specific ad groups, such as your category and best sellers than your All Products ad group. In the first image above (the screenshot from AdWords), you’ll notice the All Products bid is set at the lowest cost per click (CPC) of 30 cents, while almost every other ad group has a higher CPC.

What happens is that products which are in both your All Products ad group (green in the above diagram) and another ad group: category, best seller, etc. (blue, orange or purple above) will default to the ad group with the higher bid.

This is fine, in fact you want this with almost all of your ad groups. Where problems come about is when you’ve created too many ad groups in addition to your All Products ad group.

Imagine the above visual, but with much larger product overlap. So instead of three category ad groups each containing 20 products which are in the All Products ad group, you might have three (or likely more) category ad groups which collectively have 120 of the 200 products in the All Products ad group.

Here is another way to break down that scenario:

Since Google defers to the highest bid, and the All Products ad group generally will be given the lowest bid, those products which are in both the All Products ad group and other ad groups will be defaulted to that higher bid by Google. So ultimately, only 80 products in the All Products ad group would be at the lower bid in this fictitious scenario.

Essentially you outbid everything in the All Products ad group because all of those products are in other ad groups with higher bids.

You want bid overlap in certain situations, but you run into trouble when you have too much.

PLA bid overlap, big whoop. So what does that mean for your online marketing campaign on Google Shopping?

Well it means you could be significantly over- bidding for products which aren’t performing well. And it means you aren’t segmenting your data correctly.

When creating Product Listing Ads ad groups, avoid the following:

Creating ad groups for every one of your Google Shopping product feed categories, brands, or other product variables. You likely want to break out more than one ad group for brands or categories in your feed, but you shouldn’t have ad groups for every category or brand, etc.

Creating ad groups for individual products. You’re going to lose your mind if you start to break down PLA ad groups by individual products, and you have the potential for creating bid overlap in addition to making tracking ad groups more difficult. This sounds like a good idea, but getting too detailed actually isn’t a good strategy at all.

Instead, down bid products in your All Product or other ad groups to a low bid category (use a live label), which will limit visibility for those products and decrease spend. Inversely you can create best seller and top 100 (top 50, etc.) product ad groups to elevate products which perform well.